Can I get DRO to take over IVA and other debts

JennyT87

I took out an IVA at the start of the year to cover approx £7k of debt and was managing okay paying £80. Since then I have had to move home quite suddenly and now have water and electric/gas debts from my old property. I recently had to have an interveiw under caution for overpayment of housing benefit and income support (mix up from a time period of finishing uni and starting work) which is classed as fraudulent debt.
So I started struggling again with money as I tried paying stuff back. I now find myself paying over £300 a month for debts again. I'm a single parent and earn just enough to qualify for pretty much nothing.I'm trying to live on £300pm for me and my 8 and 5 yr old once main bills are paid and im struggling alot. I was considering bankruptcy but i cant include the benefit overpayments and dont have the £680 upfront fee.
If i apply for DRO will they take over my IVA debts too? I think I can cope with paying back the benefit payments of I don't have the other stuff weighing me down
Sorry for rambling I'm really struggling and dont know what to do anymore

Thanks in advance for any advice

EssexHebridean

Hi Jenny - I can't answer your question but sure someone like Fatbelly or Sourcrates will be along shortly - they're our resident experts on such things!

You might find it helpful to put together an SOA (Statement of Affairs) to get all your incomings and outgoings in one place and give you a proper budget to work to. You'll find the link to the SOA in the "sticky" thread at the top of the board. If you want to you can "format for MSE" and post it in here and we can take a look to see whether there are any areas for savings that you might have missed.

sourcrates

Hi,

An IVA for 7k of debt was never a good choice, you would have to let the IVA fail first, that may take some time, I suggest you speak to your IP about your options, as your creditors can make you bankrupt after an IVA fails.

Nothing happens quickly though so don't panic, once it's failed, you can apply for a DRO, as long as you meet all the qualifying criteria, if your benfit overpayments were due to fraud, they would count towards your debt totals, but would not be written off after the 12month monotorium period, you would need to settle those seperatly.

JennyT87

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 136
Other income............................ 0
Total monthly income.................... 1836

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 88
Electricity............................. 73
Gas..................................... 30
Oil..................................... 0
Water rates............................. 65
Telephone (land line)................... 26
Mobile phone............................ 38
TV Licence.............................. 12.37
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 30
Other child related expenses............ 44
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 22
Buildings insurance..................... 0
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 30
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1153.37


Unsecured Debts
Description....................Debt......Monthly...APR
Iva............................0.........80........0
Water..........................0.........40........0
Gas and electric...............0.........40........0
Housing Benefit o/p............0.........70........0
Income support o/p.............0.........70........0
Vanquis........................0.........50........0
Total unsecured debts..........0.........350.......-


Monthly Budget Summary
Total monthly income.................... 1,836
Expenses (including HP & secured debts). 1,153.37
Available for debt repayments........... 682.63
Monthly UNsecured debt repayments....... 350
Amount left after debt repayments....... 332.63

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -0

JennyT87

sourcrates wrote: »

Hi,

An IVA for 7k of debt was never a good choice, you would have to let the IVA fail first, that may take some time, I suggest you speak to your IP about your options, as your creditors can make you bankrupt after an IVA fails.

Nothing happens quickly though so don't panic, once it's failed, you can apply for a DRO, as long as you meet all the qualifying criteria, if your benfit overpayments were due to fraud, they would count towards your debt totals, but would not be written off after the 12month monotorium period, you would need to settle those seperatly.

Thank you, I know I acted too quickly with the IVA , at the time I was up to my eyeballs in payday loans,credit cards etc and paying back 600/700 a month to 5 or 6 different debts. Some of it longstanding from uni and relationship breakdown and I think I just jumped at the oppourtunity to not be paying so much.

sourcrates

JennyT87 wrote: »

Thank you, I know I acted too quickly with the IVA , at the time I was up to my eyeballs in payday loans,credit cards etc and paying back 600/700 a month to 5 or 6 different debts. Some of it longstanding from uni and relationship breakdown and I think I just jumped at the oppourtunity to not be paying so much.

There will be fees to pay to your IP as well, these will be deducted from the pot of money your IP holds, then anything left will go to your creditors.

Speak to your IP's office as you need to be sure of your situation.

JennyT87

Should I just explain that my financial situation has changed and see what they say first then?

sourcrates

JennyT87 wrote: »

Should I just explain that my financial situation has changed and see what they say first then?

Payments can be varied, any permanent change in payments must go to a creditors meeting to decide.

Speak to them yes.

EssexHebridean

OK - let's take a look then. Comments in red...

JennyT87 wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 136 2 lots of Child benefit I assume? Definitely nothing else you can claim? You've checked recently?
Other income............................ 0
Total monthly income.................... 1836

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 88 Single person discount applied by the look of it - do you pay this over 12 months or 10? If 10, look to switch as that helps with cashflow and buidgeting
Electricity............................. 73 Whoah - this can be brought down a LOT!
Go round the house and turn off EVERYTHING that is not in use - so TV's on standby,
chargers plugged in, lights, you name it. Ask on freecycle for an electricity monitor - with the advent of smart meters I bet you'll find one out there - and start working out what your "base use" is - and learn what makes a big hit to that use. (Clue - electric showers are a demon so if you've got that running for a long time each day, invest in a shower timer.) Make sure you're on the best deal for your utilities too.
Gas..................................... 30 Just for heating? Or heating and cooking?
Oil..................................... 0
Water rates............................. 65 This sounds high - is this metered?
Telephone (land line)................... 26
Mobile phone............................ 38 High - as soon as you're out of contract look to chop it back to a SIM only deal - you can get one with inclusive calls and texts and a decent chunk of data for 310 a month
TV Licence.............................. 12.37 That's an odd amount - normally £12.12?
Satellite/Cable TV...................... 40 If you're really struggling then cut this back to freeview
Internet Services....................... 0
Groceries etc. ......................... 0 You & two children should be able to manage on a maximum of £200 a month but you do need a figure here.
Clothing................................ 0 budget for basics for the children at least -
£10 per month
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 30
Other child related expenses............ 44
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 22
Buildings insurance..................... 0
Contents insurance...................... 15 This is high - shop around and see if you can get a better deal but be careful about cancelling mid-year - you MAY have to pay the balance of the year anyway so check first. Either way shop around ready for renewal -
I just paid £87 for a year for ours.
Life assurance ......................... 0
Other insurance......................... 30 What's this? Is it essential?
Presents (birthday, christmas etc)...... 0 With 2 little ones? Not sustainable.
budget something.
Haircuts................................ 0 Never? None of you?
Entertainment........................... 0 You never take the kids to out for the day of for a cheeky burger? Never grab a coffee with a friend?
Holiday................................. 0
Emergency fund.......................... 0 You need to budget to start putting something away here - aim for a pot of £300 first off, as you're renting and don't have a car.
Total monthly expenses.................. 1153.37


Unsecured Debts
Description....................Debt......Monthly...APR
Iva............................0.........80........0
Water..........................0.........40........0
Gas and electric...............0.........40........0
Housing Benefit o/p............0.........70........0
Income support o/p.............0.........70........0
Vanquis........................0.........50........0
Total unsecured debts..........0.........350.......-


Monthly Budget Summary
Total monthly income.................... 1,836
Expenses (including HP & secured debts). 1,153.37
Available for debt repayments........... 682.63
Monthly UNsecured debt repayments....... 350
Amount left after debt repayments....... 332.63 Less £200 for groceries -
you can probably make up the shortfall on clothes and presents by other means. So £132 spare per month. Do you actually have this?

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -0

You're not quite as badly off as you thought there, are you!

Look to start making savings where you can - and revisit the SOA filling in the gaps and being more realistic about things perhaps. Also track down where that surplus is going. Get some figures in for your debts as well so you know where you actually stand in terms of amounts outstanding.

I have no idea whether you meet the criteria for a DRO but again, Sourcrates will confirm.

fatbelly

Until the gaps in the soa are filled in I couldn't sayy whether you would qualify for a DRO.

Are the benefit overpayments already classed as fraud? Did you admit this in the interview under caution? Have you paid an administrative penalty? Has there been a court case?

JennyT87

EssexHebridean wrote: »

OK - let's take a look then. Comments in red...



You're not quite as badly off as you thought there, are you!

Look to start making savings where you can - and revisit the SOA filling in the gaps and being more realistic about things perhaps. Also track down where that surplus is going. Get some figures in for your debts as well so you know where you actually stand in terms of amounts outstanding.

I have no idea whether you meet the criteria for a DRO but again, Sourcrates will confirm.

According to local authority I am not entitled to anything else benefits wise.

Electric was based on my usage at old property (a 3 bed house) now live in a 2 bed flat so I am hoping this will come down, gas is heating and oven but i havent actually had to use the heating since I moved in April. It is an electric shower and I try to keep showers to under 10 mins a day.

Contents insurance was due to being tied in at old property which was flood risk area and due to being tied in I am still paying a higher rate because of the company I guess ,even though I doubt a 1st floor flat will flood haha

Water is metered, I live in Cornwall and the water rates in general are pretty high here.

Unfortuantly tied into contract with phone and satilite

The other insurance is for work based union and indemnity insurance which is essential for my job (I'm a nurse) also have 120 a year for registration fees which is due next month.

Basically the 330 is what I am left with after all bills and i then take shopping, things for kids from that ...I havent had a hair cut in 8 months and dont buy myself anything really or go out...my parents take the girls for haircuts for me sometimes...my ex doesnt give me anything towards them as they to his for 2 days and nights a week and whenever they need anything new I get told 'thats what child benefit is for'...I got to buy thier uniforms with next months pay and pay for the 120 reg fee...just seems I always have an expense that takes a chunk of that 330 left after bills.

I appreciate your feedback